Travel Restrictions Hamper Southern Africa Economic Recovery

The Airlines Association of Southern Africa (AASA) has warned that if the latest leisure travel restrictions are maintained, southern Africa’s aviation industry and the region’s entire economy will face a much slower and arduous recovery. Four airlines in southern Africa have already entered administration since the crisis began.

The AASA, as well as the International Air Transport Association (IATA), cautioned that without urgent government relief, more carriers and their employees are at risk, as is the wider African air transport industry, which supports 7.7 million jobs on the continent.
Due to the Covid-19 pandemic, airline revenues from southern African countries are forecast to decline by 60% in 2020 and the number of passengers to fall by 58%.

“Our industry is in crisis and while we have achieved much, we must do more. Going forward, our work is cut out for us in removing obstacles in our way, re-building our industry and enabling the recovery of the economies we serve and connect through the vital connections we provide for trade, commerce and tourism. We must foster trust between governments and our industry and engage more directly with each other. We cannot exist without each other and must work together to strategise, plan and set about repairing the damage that has been done and preparing for a stronger, healthier and better future,” said AASA’s CEO, Chris Zweigenthal, during the association’s virtual annual general meeting last week.

He added that the inability to trade and generate revenue while continuing to incur fixed costs, triggered an industry-wide liquidity crisis, forcing organisations to rapidly implement drastic cost saving measures.
Said Zweigenthal: “The social and financial distress has been particularly hard. Many employees have taken pay cuts, been placed on paid or unpaid leave, temporarily laid off and, in the worst-affected businesses, retrenched. These have been traumatic experiences especially where alternative employment is extremely limited.”

Ensuring urgent government relief to the region’s air transport industry, ensuring that pledged funds from international organisations reach those in need and accelerating the restart of aviation by replacing quarantines with testing. These are the key priorities outlined by the IATA to ensure the long-term sustainability of aviation in southern Africa as the industry continues to suffer from the devastating effects of the pandemic and associated travel restrictions.

“Air transport and the industries it supports provide millions of jobs and millions of US dollars in economic activity in Southern Africa. It is crucial that this sector gets the help it needs to survive and be able to sustain a recovery. To date, South Africa, is the only country in Southern Africa that has committed to providing direct financial support to aviation,” said Sebastian Mikosz, IATA’s Senior Vice President, Member and External Relations.

Also speaking at the AASA’s virtual AGM, Mikosz noted that over US$30 billion in financial support for air transport and tourism has been pledged by international finance bodies and other institutions, including the African Development Bank, African Export Import Bank, African Union and the International Monetary Fund. However, far too little of it has reached its intended recipients owing to overly complex application and creditworthiness processes, and conditions to secure finance.

“We recognise that these organisations have a responsibility to ensure this aid is well spent. Nevertheless, financial bottlenecks need to be urgently unblocked so that the money can flow quickly and reach intended participants to prevent more airline closures and job losses,” said Mikosz.

Mikosz also urged governments and health authorities in the region to cooperate to replace quarantine restrictions—which are stifling demand for travel and inflicting further damage on air transport and tourism businesses—with Covid-19 testing to restart air travel safely.
While many of the countries in southern Africa are re-opening their borders to regional and international air travel, in Rwanda, Seychelles and Namibia passengers are still subject to a mandatory quarantine. These measures effectively stop people from travelling. IATA is calling for the systematic testing of passengers before departure without the need for quarantine on arrival. This will enable governments to safely open borders while balancing social and economic considerations and will better support recovery efforts.

“If we cannot restart the air transport system in a coordinated, efficient and consistent fashion, we will not be able to restore the much-desired confidence that would see the return of demand across the entire travel and tourism value chain. This will result in many more livelihoods being lost and further economic decline along with hardship and poverty,” said Mikosz.

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